Credit-card legislation missing key reform

If the credit-card bill approved by the U.S. Senate on Tuesday is signed into law by President Barack Obama, as is widely predicted in the media, some much-needed reforms will take place, but one critical reform will be left out.

The bill places a number of well-deserved limits on credit-card companies. It curbs sordid practices that beckon to be spanked. For example, it bans arbitrary interest-rate increases and hidden fees. The bill eliminates fine print and requires clear disclosure of all terms of credit-card agreements and any changes made to them.

According to the Christian Science Monitor, the bill "ends the practice of 'universal default,' which allows companies to dramatically raise interest rates on a credit card if the consumer is more than 30 days late on any other payment." It also freezes introductory rates for the first year and forces periodic reviews of customer records. It mandates rate cuts for cardholders who pay at least the minimum balance on time for six months.

Here's one amendment I like: The new law will require that statements be mailed to customers 21 days in advance of the bill's due date. I've been noticing what I call late bill creep in recent years. Bills, credit-card bills included, seem to be giving people less and less time to send back payment in a timely manner.

And I'm what my husband refers to as a "return mail payer." To wit, the bill comes in the door and my payment goes out the following day.

But the most important thing Congress and the president seem not to have done in this bill is to force credit-card companies to take responsibility for giving credit to people who don't deserve it and can't afford to repay it.

I'm not the type of person who feels sorry for people who are financially irresponsible. Anyone who knowingly took out a mortgage they could not afford to repay during the last housing boom, and who lost a house as a result, will not get any sympathy from me. I have always bought less expensive housing than I could afford, on purpose. Who wants to be house poor?

But I have also been harangued several times each week, by mailings and phone calls from credit-card companies wooing me to go deep into debt. I greet such pitches by hanging up (if by phone) or tossing the mailer in the trash.

I have more sympathy, however, for the person who resists temptation to borrow week after week, only to eventually cave into the credit-card companies' entreaties. If that person then racks up unaffordable debt, isn't the credit-card company at least partially responsible?